Forces all represent important driving forces; any industry subject

Forces that increased global integration

The
significant growth of the world economy over the last few decades has changed
with dynamic interaction between different driving forces. In the last decades,
companies across the globe in various industries have achieved significant
success by following international, multinational or global strategies.

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Regional
economic agreements, converging market needs and wants, technology advances,
the pressure to cut costs, the pressure to improve quality, improvements in
communication and transportation technology, global economic growth, and
opportunities for leverage all represent important driving forces; any industry
subject to these forces is a candidate for globalization.

Multilateral trade agreements

Multilateral,
regional and bilateral trade agreements are all agreements between two or more
countries for the mutual exchange of goods and services for the mutual benefit
of all countries. In accordance with these trade agreements; agreements have
been exchanged in trade relations, trade promotion, financial investment, etc.
So trade between countries facilitates simple import and export procedures, and
reduced limitation of foreign trade exchange, eased and reduced transportation
costs, and also reduced taxes rates. The ultimate goal of any trade agreement between
countries is to improve the economic situation. Some of the world and regional
trade agreements are:

SAARC
(South Asian Association for Regional Cooperation), NAFTA (North American Free
Trade Agreement), Common Market for Eastern and Southern Africa (COMESA),
Economic Community of West Africa States (ECOWAS), and Southern Africa
Development Community (SADC) etc.

Technological advancement

The
effects of technological development on the global economic structure are
undergoing dramatic transformations in the way companies and countries regulate
production, commercial goods, capital investment and the development of new
products and processes. Advanced information technologies allow for instant
communication between remote operations of global institutions. This caused the
expansion of transnational companies to be closely tied to technological
advancement.

The
rate of fast innovation and the technological flows dynamics mean comparative
advantage. All this have led to design greater interdependence between
companies and nations. So technology is one of the most influencers to
globalization.

Communication

The
proliferation and technological revolution in many aspects, such as modern
communications technology; has enabled companies and their employees transform
the ways they interact with customers and colleagues in distant locations.
Regardless of the physical distance, instant communication and access to
relevant information have become readily available and have encouraged greater
collaboration across borders. Therefore, technology is one of the driving
forces for globalization.

Global economic growth

The
global economic situation is changing rapidly. There is a big difference in the
growth rates of economies in the developing and developed countries. Developed
countries economies have become inactive and stationery, because of the
saturation of the market, on the other hand, developing countries are
experiencing a huge growth rate in various business sectors. Technology
improvements, cheap skilled labor, highly invested in (R&D) research and
development, are some of the factors that have motivated on developing
countries to achieve a high rate of business growth. It is therefore very
important for developing countries to have strong international trade links
with developed countries.

 

Product development efforts

The
immediate effect of technological growth is the growth of new products. Fast
technology accelerates obsolesce of product. Many
companies were encouraged to invest in research and development with
cross-border partners. These companies need to continue to operate and overcome
competition. Many companies have crossed their borders and need to update their
products through research and development with foreign companies. This
leads to globalization.

Leverage

The
leverage is simply the kind of business that a company enjoys when it comes to
business in more than one country. The most three important types of leverage.

a. Experience transfer: The experience
that an enterprise gains from doing business in one country can be effectively
transferred to another country. This is called the transfer of experience

b. Large-scale economy: The art of
reducing production costs is known as a large-scale economy. One of the main
reasons for a large-scale economy is technological advancement. Many companies
are now actively investing in R & D in an effort to reduce production
costs. They are trying to produce cheaper and more reliable products.

c. Resource Utilization:  Strength of global company is its resource
utilization. It can now successfully outsource its resources globally thereby
making better utilization of resources.

Pressure cost reduction

The
production of goods and services involves the transformation of resources –
such as labor, natural resources, technology and logistics to finished
products. All factors having a significant effect on production costs can be
expected to affect a company’s competitive position in world markets, so this
caused to Global Companies to reorganize their manufacturing and distribution
operations to be more efficient and productive. In order to increase
productivity, companies should invest in the transfer of new and efficient
technology and TQM systems. This increases investment costs first, but
Resulting in a clear improvement in quality, reduces rework, human errors,
rejection, customer complaints, compensation, etc. (Beaumont & Schroeder,
1997).

 

Advanced Transportations

Transport
has become a very powerful organ for international trade; companies are always
shipping goods long distances using different transportation modes, success
depends on safety and fast delivery. This depends largely on the quality of
transport and infrastructure. That is why international trade development has
been affected by transport, and the development of transport and infrastructure
is largely influenced by the demand for international delivery of commodities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

QUESTION
2

Discuss
the different strategic options available for global market expansion. Provide
an example for each of the options.

           (15 marks)

 

Different entry strategies

Every
Company develops a market strategy aligned with company’s corporate strategy
and company’s goals, the marketing strategy always addresses the market
differences, market competitiveness, opportunities and risks, and overall
market environment. Even when the company planning a marketing strategy for the
local country is not easy, and the problem and complexities increase when the
company conducts business internationally. The goals and objectives of the
company can vary from time to time and from market to market, the international
market structure is dynamic and continuously changes time to time and from
country to country. The opportunities, restraining forces and economic trends
that affect market strategy are constantly changing. These changes require that
international marketing executives are to be dynamic, flexible, and creative.

Companies
can enter the foreign markets in different ways. One strategy of entering to
specific market does not apply to all international markets. There are many
factors that can affect your strategic choices, including, but not limited to,
tariff rates, the degree of required product availability, and the costs of
marketing and delivery, communication and transportation cost. While these
factors may increase your costs, it is expected that an increase in sales will
offset these costs. The following tactics are the basic input options and
choices that are open to any company want to enter the international market.

 

1.    Direct
Exporting

2.    Licensing

3.    Franchising

4.    Partnering

5.    Joint
Ventures

6.    Buying
a Company

7.    Piggybacking

8.    Turnkey
Projects

9.    Greenfield
Investments

 

Direct Exporting

Direct
export is when a manufacturer or supplier sells its products directly to
international markets without external intermediaries, such as sales
representatives, distributors, and retailer. Direct export requires the study
of the market to determine the product market, the international distribution
of products and create links with consumers. The viability of direct exports
depends on the size and marketing capabilities of the company, the previous
export experience, commercial conditions in the selected market and the nature
of the product.

Licensing

Licenses
are the Permission to contractual agreement under which one company (the
licensor) provides assets to another company (licensee) in exchange for
royalties, royalties or other forms of compensation

Just
as the state grants individuals a license to do business, companies sometimes
grant licenses to other organizations to allow them to use intellectual
property. A licensing is a contract whereby one party grants permission to use
the patents, trademarks, copyrights, projects or trade secrets to other
parties. The organization receiving the license or the licensee compensates the
licensor by paying a fixed fee, royalties or a combination of the two. The
agreement does not transfer ownership of intellectual property. Expanding the
rights of third parties, small business owners can expand their coverage and
increase sales without the risk of investing in new locations or distribution
networks and the risk of failure.

 

Franchising

The
franchise model is that franchisees use a successful business model and a brand
of another company to manage an independent branch, which, in fact, is a
company. Franchisors possess a sufficient degree of control over the business
and processes of the franchise, and also help the brand and marketing support
of franchising. Franchisers also usually ensure that affiliates do not eat from
each other.

Franchising
develops business in a similar way, but franchisees not only use the franchisor
intellectual property but also their policies, procedures, operating systems.
In addition, and trademarks, franchisees often use franchisors distribution
systems and marketing activities. In turn, the franchisor usually pays an
advance payment, royalties, and sometimes a monthly or annual fee. Like
licensing, franchising can help small businesses grow rapidly.

However,
before providing franchises, companies must regulate their internal systems,
operations, marketing, and distribution. Before becoming a franchisor,
companies must also fill a wide range of legal documents and franchising
agreements. Franchisee also experienced a long and thorough selection process.
Franchising usually takes longer and setting up more.

Example:
McDonald’s is one of the best-known examples of a business that has grown
through franchising. (By contrast, Starbucks has grown by opening its own
branches).

Partnering

Partnering
relationships involve two or more companies working together to achieve a
specific purpose or toward the attainment of common business objectives. Joint
ventures, strategic partnering, cross-licensing, co-branding, and technology
transfer agreements are all examples of partnering strategies designed to
obtain one or more of the following:

direct
capital infusion in exchange for equity and/or intellectual property or
distribution rights; a “capital substitute” where the resources which
would otherwise be obtained with the capital are obtained through joint
venturing; or a shift of the burden and cost of development (through licensing)
in exchange for a potentially more limited upside.

Joint Ventures

Joint
ventures – this is a special form of cooperation, which provides for the
creation of a third independent managed company. Both companies agreed to work
together in a certain market, whether geographic or food, and create a third
company for this. Risk and profit are usually distributed evenly.

Example:
Sony / Ericsson phones are the best example of joint ventures.

Buying company

Some
companies prefer to buy established company instead of starting one from zero.
There are many Benefits to buy a running company such as:

The
difficult start-up work has already been done. The business should have plans
and procedures in place.

Buying
an established business means immediate cash flow.

The
business will have a financial history, which gives you an idea of what to
expect and can make it easier to secure loans and attract investors.

You
will acquire existing customers, contacts, goodwill, suppliers, staff, plant,
equipment and stock.

A
market for your product or service is already established.

Existing
employees and managers will have an experience they can share.

 

 

 

 

 

 

 

PART
B:

 

QUESTION
1

Multinational
companies increasingly use ‘Global Marketing’ and have been highly successful.
Evaluate the four major categories of the “Global Marketing”
benefits, quoting with examples for each.

           (15 marks)

Global Marketing benefits

Improve Product and services

When
the companies want to improve their products and services, mostly they use to
offer unique products or services to the customers. Unique product and service
give Companies a competitive advantage over to their rivals because their
competitors do not offer what they offer. In order to develop unique products
and services, companies often invest a research and development, which is
something that cannot afford many small businesses. Affluent companies need to
be careful so that they can be copied easily because they can ruin the
specialty.

The
companies used differentiation strategies, such as an affordable product
strategy, also focus on specific market specifications. But instead of
marketing a product or service cheaper, it is considered to be unique in some
way. For example, an enterprise can develop its products, specially designed
for left-handed people, focusing on a narrow market segment, the company can
focus on their efforts, resulting in a broad market product development may
require fewer resources

Example:
Dell combined operational and process innovation with a revolutionary
distribution model to generate tremendous cost-savings and unprecedented
customer value in the PC market.

 

 

2. Reduce Costs to Improve Competitiveness

 

a) Reduce Costs

 Cost leadership strategies are generally used
by a large company that has low-cost products with economies of scale. They
turn and sell these cheap products to buyers by adding minimum amounts to keep
the price low. The strategy is based on being the best or cheapest service
provider. it is difficult to compete with your competitors because this
strategy requires a broad-based economy, which is hard for small businesses.

A
viable strategy of concentration is similar to the management strategy, except
that it focuses on narrow markets. Instead of marketing the product to the
entire population, it is marketed in a particular population. The goal of the
strategy is to be the cheapest bidder in that segment. For example, an
electronic store can target its market to the same city; Its goal is the
cheapest city, but not necessarily the cheapest in its entirety

Increase competitiveness

The
global competition has grown. The most important challenge for companies is to
exploit new resources and markets in the face of intense and growing global
competition. The challenge for companies is to design and implement support
policies and strategies. In order to increase and strengthen competitiveness,
companies must accelerate their partnership.

The
effect of competition challenge affects the business sectors. Efforts to
effectively respond to the global environment, companies need to develop a
variety of technology, marketing, management, human resources and export
capabilities in the fields of finance and need to constantly update them over
time. Creating the competitiveness of companies especially in the export market
is very important. supporting competitiveness through a coherent strategy.
Successful translation of the strategy depends on the close and active
involvement of businesses and administrations.

 

 

Example:

Just
in Time Manufacturing (JIT) – also known as “lean manufacturing”
Refers to a system of production in which the product is not manufactured until
the product is ordered and payment is not made for it. Some companies that have
successfully implemented JIT include Toyota, Dell, and Harley Davidson.

Enhance customer preferences

There
is no doubt that today the customer is a king. In all countries, consumers have
a wide range of products and services with attractive prices. Consequently,
both the goods and service providers should be more customer-oriented and have
to change buyer needs and meet their expectations more than ever before.

This
includes fast delivery time and less optimized production and emphasizes
customer loyalty through better customer service, brand strategy, and social
media. And very important, many companies have to offer different prices and
specifically designed new products.

For
example, General Electric created a portable PC based ultrasound device in
rural China and an electrocardiogram tool in rural India – both for small and
relatively cheap ones,

Survival and growth

In
order companies to survive, they need to grow. Since most countries have not a
big market size, resources, and opportunities, they have to do business with
others to survive. For example, most European countries are relatively small
According to their population size, they need foreign markets to achieve big
economies of scale to compete with American companies. In the case of survival,
international competition cannot be an election.

Companies
that already have sufficient market share and international experience can,
however, expand successfully. In addition, no marketer cannot ignore the
tremendous potential of the international market.

 

 

 

QUESTION
2

Integrated
marketing communications (IMC) is a marketing communication strategy to reach a
wider audience. Why use social media? Determine and discuss various tools
utilized for marketing via Social Media, listing the various advantages and
disadvantages.

           (15 marks)

What is Social Media?

According
to Evans (2008), there is a self-generated, authentic conversation between
people about a particular topic of mutual interest on ideas and experiences of
social media participants. Therefore, social media is really about sharing
everything and collective perspectives, which often endeavors to have more
specific or knowledgeable options at the end. In addition, social media is
accompanying changes in time as it allows people to create content in an
interactive way, whenever they want to add any additional information. Social
media is also constantly developing because they are part of Internet
technology, which is regularly revised in additional or fashionable fashion.

Social
media is a revolution that includes personal, professional, and commercial
joints seamless way, in a blink of an eye. It maximizes cross-circulation and
connectivity. Contrary to traditional media channels, which provides one-way
experience, Social media is based on a two-way interactive experience between
customer and company. One of the best features of social media marketing today
is a low barrier for businesses.

But
which platforms are best to use? To create a successful social strategy, you
need to know how they work. Every marketer should have a list of social media
platforms to get your business’s market and new customers.

 

 

 

List of important social media platforms                                            

1.   
Facebook

With
more than 2 billion monthly users, Facebook has the most customers from any
Social Media platform. This provides an unusual way for your business to
communicate with your potential customers around the world. And from the point
of view of advertising, it is managed and allows using the simplest targeting.
We use Facebook for advertising to match our existing customers with similar
features that have similar characteristics. We push them to the selection page,
where we can get their name and email address.

2. Twitter

The
value of Twitter lies in your ability to evaluate your messages: more people
share your messages and “retweet” your content, like many followers,
as you would like. You can publish the latest news, updates, and articles on
the main media. Hashtags are very important for creating speed for your
messages.

3.   
LinkedIn

working
in the field of Business, the social network is very important. Connecting with
professional via LinkedIn is the simplest way that you can hunt professionals
in the different industries, you can target them by industry, position, and
profession. With all social networks, LinkedIn is famous to build more
relationships than any other social media; instead of starting with a sale;
Start by creating a connection. One of the best business opportunities is the
LinkedIn Group. The company must create groups in your target location or in
the industry and invite others to join your target market.

4.   
Google+

 

Google+
is a new social network connecting people together in the same way that
Facebook does.

 

 

5. Instagram

This
is a popular platform for sharing photos at events and exhibitions when hosting
events occur, and then companies always encourage the publication of photos for
the audience using their hashtag.

6. Photo Sharing – Flickr

Flickr
is Photo sharing platform, and allow users to upload and download high-quality
images and offer online support for others. On this site, users can generally
license their photos for specific licenses. In other words, if you return to
the owner and respect a lot of people, others can use the pictures.

Content
Restrictions. The most popular photo sharing destinations are Flickr, Image
Shake, and Pinterest.

7. YouTube

The
most popular social network site are video sites. Video sharing sites allow
users to download the video for free and is usually watch on the web or on
someone else’s website or blog. These sites have options for sharing options
and other print options.

You
can create a YouTube channel to share with your company’s review and contact
info, including links for businesses, including links to links. They may also
have the background. Increase your brand awareness through presentations,
product descriptions, or ads, tutorials, or tips and hints. Monitor playlist
and subscribers to measure your video campaigns success.

8. Blogging

A blog
is a magazine published on a web-based platform, consisting of standard message
exchange, so the most recent message will be displayed first. Blogs used for
Branding, promotions, marketing and public relation of businesses or businesses
are known as external corporate blogs.

 

 

9. WeChat

WeChat
is a universal service provider developed by Tencent, which also offers games,
online shopping, and financial services. Users can get almost everything from
their smartphone, and never leave the app. That is why it has grown from
China’s most popular social media platform.

WeChat
is much more comfortable than any Western Apps. because it is a mix of
WhatsApp, Facebook, Instagram, and Skype. It also contains a million
third-party application.

 Advantages
of social media

Marketing
in social networks is a great way to expand your public relations at a very low
price compared to traditional media marketing for business. Setting up a
presence on widely used platforms, such as Facebook and Twitter, can help
attract new customers and make your brand more visible. In addition, social
networks can help bi-directional communication, improve customer service and
allow companies to acquire new information about their customers and receive an
individual communication based on this knowledge.

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